Democrats Unveiled a Plan to Distribute Quarterly Checks to Americans Through a Levy on Oil Firms That Earn Enormous Profits | March 2022

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Democrats unveiled legislation on Thursday to tax the major oil firms, which are reporting their highest profits in years, and use the proceeds to deliver quarterly checks to Americans who are experiencing sticker shock everywhere they go.

The proposal would apply only to huge corporations, such as ExxonMobil, that produce or import more than 300,000 barrels of oil per day, and would exempt smaller businesses. The 50% tax would be levied on the difference between the current price of a barrel and the average price from 2015 to 2019.

The bill’s primary sponsors are Rep. Ro Khanna of California and Sen. Sheldon Whitehouse of Rhode Island. Senators Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts, Michael Bennet of Colorado, and Sherrod Brown of Ohio are among the other co-sponsors.

In addition, the plan would establish a quarterly payment scheme to deliver direct cash to Americans who are struggling to keep up with escalating prices.

The income requirements were comparable to the third stimulus check released last year: individuals earning less than $75,000 and couples earning less than $150,000 would be eligible for the payouts. At $120 per barrel, single filers would earn $240 per year, while joint filers would earn $360.

 

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“The most important thing is that it will save everyone money,” Khanna said in an interview. “If you’re big oil, you’re not going to want to pay this tax, so you’re going to be willing to cut prices.”

The plan’s chances of becoming law are slim. Republicans are opposed to tax increases, and centrist Democrats may oppose it as well. Sen. Joe Manchin’s office did not immediately reply to a request for comment.

Energy prices have risen in the aftermath of Russia’s invasion of Ukraine, as traders avoid Russian oil, thus excluding one of the world’s top oil producers from global markets. Climbing prices prompted companies such as ExxonMobil and Chevron to post their highest profits in years, even before the Kremlin launched its military operation.

According to AAA, the price of gasoline reached $4.31 a gallon on Thursday. It’s expected to worsen when the US imposes a ban on all Russian energy imports in order to punish Russian President Vladimir Putin.

“This is a move we’re taking to inflict additional pain on Putin, but there will be costs here in the United States as well,” President Joe Biden said on Tuesday.

However, Americans are noticing a rise in pricing throughout the board, not only when they fill up their gas tanks. According to a survey released Thursday by the Bureau of Labor Statistics, prices increased 7.9 percent over the previous year, mainly for furniture, chicken, new cars, and steak. According to Insider’s Ben Winck and Madison Hoff, inflation has surged to its fastest rate in four decades.

 

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Democrats are looking for methods to reduce family expenditures by establishing cheap childcare and lowering prescription drug costs, among other new domestic initiatives. However, the majority of their economic programme is blocked due to Republican opposition and Manchin, a Democratic holdout.

In the near term, Democrats have proposed suspending the federal gas tax of 18.4 cents per gallon in order to provide some relief at the pump. However, it appears unclear that this will be enough to overcome significant Republican opposition.

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